Mortgages
There are many types of mortgages available ranging from residential to overseas mortgages including buy to let and commercial.
Here is a brief description of some of the mortgage types (click to view):
The Buy to Let market has for many years been very popular due to continuous rising house prices. The professional and first time landlord who have entered this arena in order to provide them with an income in later years similar to a pensionable income will have opted for the traditional capital and interest repayment mortgage, this way they can feed the rental income in to the loan with a view to reducing the capital balance as quickly as possible. The result is an 'unencumbered' asset to do with as you wish but most investors looking to maximise the difference between the monthly payments and the rental income will opt for an interest only type mortgage.
The Financial Services Authority does not regulate some forms of buy to let or commercial mortgages.
The Financial Services Authority does not regulate some forms of buy to let or commercial mortgages.
For many years most individuals only dreamt of owning a property abroad but with growing equity combined with the introduction of more mortgage lenders willing to lend abroad and with more flight operators flying to more destinations has meant that this market is rapidly becoming an important part of the mortgage industry. The type of mortgage arranged and size of loan offered will depend on the country you are buying in, and whether the mortgage is secured against your property in the UK or on the property you are buying. We can also introduce you to many Real Estate and Developer contacts who can provide you with details of properties that are available to buy in countries ranging from America and the Caribbean to Spain and the continent.
Changes in the exchange rate may increase the sterling equivalent of your debt.
The Financial Services Authority does not regulate overseas mortgages.
Jargon Buster
APR This stands for Annual Percentage Rate and can be used to compare the cost of borrowing money from different lenders.
Basic valuation A check carried out by a surveyor, on the property, which determines how much the property is worth and to confirm that the property is suitable for a mortgage.
BBR This stands for Bank base rate, which is set every month by the Bank of England.
Buy-to-let mortgage A mortgage designed for property investors who buy a property and then rent it out.
Capital and interest mortgage This is sometimes called a repayment mortgage. With this type of mortgage you pay off some of the capital (the amount of money borrowed) and some of the interest every month.
Capped rate With this type of mortgage, the rate that you pay is variable to a maximum limit set at the outset for a fixed period (it can go up and down).
Cashback* Some mortgages offer cashback as an incentive. It is a cash sum that you receive when your mortgage completes.
Conveyancing The legal process for buying and selling property.
Discounted rate* With this type of mortgage, the rate that you pay is discounted from the lender's standard variable rate. This discount is guaranteed for a set period of time and the rate can go up and down.
ERC This stands for Early Repayment Charge and is an amount of money that you may be charged if you fully repay your mortgage before a set time, usually before the end of the incentive period.
FSA This stands for the Financial Services Authority. The FSA is an independent organisation that regulates specific areas of the financial services industry including mortgage advice.
Fixed rate* With this type of mortgage, the rate you pay is fixed for a set period of time.
Freehold This means you own the property and the land the property is on.
Full Structural Survey This survey is a more in-depth review of the condition of the property than a homebuyer survey. It does not incorporate a basic valuation.
HLC This stands for higher lending charge and it is an insurance policy that you pay for but which protects the lender in the event that the lender may have to repossess the property, sell it and then does not retrieve enough money in the sale of property to repay the mortgage in full. This policy would then pay the outstanding balance remaining. The borrower, however, is still responsible for the outstanding balance.
Homebuyers report This is a survey, which reviews the condition of the property, and incorporates a basic valuation.
Interest-only With this type of mortgage you only pay off the interest every month, not the capital (the amount of money borrowed). The capital is paid back at the end of the mortgage term. A repayment vehicle, such as an endowment policy or Individual Saving Account, could be used however you should seek independent financial advice. Pink Home Loans do not advise on investments.
Leasehold This means you own the property for a set period of time but not the land the property is on. After the set period of time, ownership of the property reverts to the freeholder. Many flats are leasehold properties.
LTV This stands for loan to value and denotes the relationship between the amount of money you want to borrow (the loan) and the cost of the property (the value) and is expressed as a percentage. For example, if you borrow £85,000 and your property costs £100,000, then the loan to value is 85%.
Mortgage This is a loan that is used to buy a property, where the loan is secured against the property as a charge. This acts as security for the lender in case you fail to repay the loan.
Repayment mortgage This is sometimes called a capital and interest mortgage. With this type of mortgage you pay off some of the capital (the amount of money borrowed) and some of the interest every month.
Stamp Duty Land Tax (SDLT) This is a tax that may be payable on purchases of flats, houses and other UK land and buildings.
Sub-prime mortgage This is a mortgage that is designed for someone with adverse credit.
Tracker mortgage With this type of mortgage, the mortgage rate tracks the Bank of England base rate by a set amount for a specified period of time.
Variable rate This is the rate set by a lender, which can go up and down.
*Additional Terms and Conditions, and Early Repayment Charges may apply to these types of contracts.
Farrell Independent Ltd is an Appointed Representative of Pink Home Loans. Pink Home Loans is a trading name of Advance Mortgage Funding Ltd, which is authorised and regulated by The Financial Services Authority.
YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE.
Each of these mortgages require specialist professional advice and we recommend that you contact us on 020 8669 9938 to speak with one of our advisors or if you prefer, please complete the contact form on our website and we will get back to you very soon to discuss your requirements in more detail.
"REMEMBER YOU ARE IN SAFE HANDS WITH FARRELL INDEPENDENT LTD SO TALK TO ONE OF OUR ADVISORS TODAY FOR PROFESSIONAL ADVICE."